P 16-5 Partnership income allocation—Profit-sharing based on beginning, ending, and average capital balances

A summary of changes in the capital accounts of the Kat, Lyn, and Mol partnership for 2016, before closing partnership net income to the capital accounts, is as follows: 

REQUIRED: Determine the allocation of the 2016 net income to the partners under each of the following sets of independent assumptions:

1. Partnership net income is $60,000, and profit is divided on the basis of average capital balances during the year.

2. Partnership net income is $50,000, Kat gets a bonus of 10 percent of income for managing the business, and the remaining profits are divided on the basis of beginning capital balances.

3. Partnership net loss is $35,000, Mol receives a $12,000 salary, each partner is allowed 10 percent interest on beginning capital balances, and the remaining profits are divided equally.